Monday, December 24, 2012

Medicine as a Product

Dr. Toby Cosgrove, a physician and the CEO of Cleveland Clinic, gave a very enlightening interview recently to the WSJ. The topic was his view of the Affordable Care Act.

He thinks this bill will replace the fee-for-service system for one that rewards hospitals for efficient and high quality care. The system will emphasize hospital organizations; physicians will not be allowed to be independent, they will be instruments of integrated care providers. Doctors will be paid a salary and will not be paid on the basis of productivity.

He expects consolidation to occur country-wide and compared the new medicine to other nationalized consumer systems: "I don't think that anyone would suggest that supermarkets have not reduced the cost of food across the United States or that books from Amazon don't cost less than books do from your local bookstore." When asked if consolidation has had an impact on costs up to now he replied it had not because "Medicare pays 6% under the cost of delivering care, Medicaid 13% under the cost of delivering care." That means that every single medicare or Medicaid patient cost more to take care of than the hospital is compensated for. That means the private insurer , Blue Cross, Etna and the like have to be overcharged to make up the difference.

When asked about the argument that physicians should not be cost conscious and should weigh only clinical factors in their decisions, Dr. Cosgrove said, "They can't do that."

So he sees the medical system shifting from physician-driven to system-driven and decisions on care to be influenced by cost considerations. If you think this sounds like the direct opposite of what one would think of as "professionalism," you would be right.

Dr. Cosgrove estimates that in ten years 75% of health care costs will be paid by the federal government and eventually it will be entirely single payer. The displacement of physician's responsibility from the patient to the hospital/system/insurer will be the end of medicine as a profession.